Discuss whether the judiciary should direct the executive on drug pricing policy. How can affordable medicines be balanced with the incentive to innovate?

The Supreme Court Bench of Justices Vikram Nath and Sandeep Mehta found that some cancer drugs were sold at up to 1,000% above the price to retailer. It called this "broad daylight dacoity" and asked the Centre to plan margin caps for all medicines and medical devices [1]. Courts should push the government to act on drug prices but should leave the design of the rules to it.

Should the Judiciary Direct Drug Pricing?

Arguments for

• Article 21: the right to health is part of the right to life (Paschim Banga Khet Mazdoor Samity, 1996). When access to medicines breaks down, the court is acting as a guardian of that right.
• Executive delay: in 2019 the NPPA used Para 19 of DPCO 2013 to cap trade margins at 30% on 42 cancer drugs [2]. Prices of 526 brands fell by up to 90%, saving patients about ₹984 crore a year [3]. Even so, the measure stayed a one-off pilot.
• The court did not set a number: it asked the Centre to work out a plan, so the design stays with the executive [1].

Arguments against

• Separation of powers: setting prices needs cost data and supply-chain studies, and courts do not have these.
• Risk of shortages: the WHO warns that medicines can disappear from shops if the allowed margin does not cover a supplier's costs [4]. A blanket cap on every drug carries this risk.

Balancing Affordability with Innovation

• Cap the trade margin, not the maker's price: trade margin rationalisation limits only the gap between the price to retailer and the MRP. The manufacturer's price is untouched, so returns on research and development are protected [2].
• Use falling margin slabs: the WHO recommends a regressive mark-up, where the allowed percentage falls as the price rises. It also advises using margin caps together with other pricing policies [4][5].
• Patented drugs: the government can negotiate prices with patent holders. If it is still unaffordable, compulsory licensing under Section 84 of the Patents Act (Natco–Bayer, 2012) checks abuse without weakening patents.
• Supply side: generics sold at low prices through Jan Aushadhi stores add competition.
• Transparency: firms should be required to disclose discounts and rebates, and the rules should be reviewed on a fixed cycle [4].

Court oversight works best when it pushes the government to act rather than replacing it. Writing trade margin rationalisation permanently into DPCO 2013, with graded slabs and separate tools for patented drugs, would give lasting effect to the right to health under Article 21 and support SDG 3.8 (universal health coverage). It would also keep India attractive for pharmaceutical innovation.